Did Gold Find New Support?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
On Monday, gold and silver both had nice rallies and the big question is: has gold found a new support level? The range since January in gold has been $1,300 to $1,365, and since the March 21 rally, there appears to be a new support level at $1,330. In the last seven days since breaking above $1,330, gold has held that level, narrowing the range and indicating there could be a breakout to the upside.
We are still playing the range with a new support level of $1,330. Until the breakout occurs, selling at $1,365 is the correct play. Consolidation can last for extended periods of time as witnessed by the current range, which has lasted over three months. Eventually gold and silver will break out one way or the other, but for now the uncertainty keeps them both in a trading range.
Watch the dollar, interest rates and the equity markets for clues. We expect the dollar to pop higher, which could create pressure on the metals. However, based on the way they have been trading, it appears they have priced in a higher dollar within the trading range. The footprints will show the way; the key here is the patience to wait for the guidance of the charts.
Keep those stops tight.